Rice exports remain firm
Following the disbandment of the Rice Export Corporation of Pakistan in 1990, rice trade in the country was liberalised. Consequently a relative decline in government interventions in the rice market has boded well for the trade statistics during the course of the last two decades, with rice exporters responding positively to the market liberalisation. With heavy private sector investments into modern processing equipment, the last decade has seen a significant increase in the quality of the Pakistani milled rice, which has subsequently enhanced market competitiveness and increased international demand. Utilising 11 percent of the countrys cultivable land, rice has grown to become Pakistans second largest earner of export revenue, with the export projections for this year slated to end up around the $2 billion mark. Rice production this year has experienced a remarkable accession witnessing an accelerated growth, with rice acreage growing by 8.7 percent to 2.5 million hectares, as compared to the 2.3 million hectares that were sown last season. With local rice consumption standing at around 45 percent, the balance is generally traded With an estimated production of 6mn tons at the end of this season, rice production is slated to grow by 27.7 percent over last year, mainly due to a 17.5 percent increase in yield per hectare as a result of increased seed quality and improved agronomic practices. Export figures have also shown remarkable resilience this season despite starting on a weak note, with Indias re-entrance into the international marketplace armed with a bumper crop that kept a lid on rice prices throughout the year. A significant loss of the Iranian market as a result of increased trade sanctions also threatened to mar exports, however, contrary to most predictions, trade statistics remain positive. Despite the tightening rice prices worldwide, diversification into newer markets has been the primary reason leading to an overall increase of Pakistani rice exports with nearly $1.9bn worth of rice having been exported at the end of Mar-12 according to data released by PBS. China alone has been responsible for sales upwards of 300,000 million tons fetching around $149 million, as the high prices of the Thai rice diverted buyer interest towards the Pakistani 5 percent broken rice, which was offered at around $450 per ton, compared to the $580-$600 per ton offered by Thailand for the same variety. Moreover, Pakistani exports to other markets including UAE, Saudi Arabia, EU and USA remained firm this season despite global shipments going down to 31.5 million tons as compared to the 34 million tons recorded during the same period of last year. With local consumption averaging around 45 percent of the produce, this seasons export statistics show a positive outlook for the future with stocks for MY2011-12 sitting comfortably at 0.8 million tons at the end of the season. Averaging roughly 5.9 million tons during the last five years, rice production forecasts also remain positive, with a roughly 6.8 million tons production estimated for MY2012-13 according to USDAs Grain and Feed Annual report 2012.